A marriage of BHP and Rio would create a force unprecedented in the mining sector -- capable of controlling the worldwide ebb and flow of armada-sized fleet loads of iron ore, copper, coal and dozens of other staples for industrial use.

Analysts said an array of interested parties, from Chinese oil companies to Siberian nickel miners, hoping to cash in on a global boom in demand for raw materials had the potential to launch rival offers.

''If you put together a consortium of Chinese, they could be out there, as well the Russians, given there is a lot of oil money being generated,'' said Shaw Stockbroking analyst John Colnan.

BHP said on Thursday it had approached its smaller rival with a three-for-one share offer, but Rio Tinto quickly rejected the deal, saying it was too cheap.

The BHP offer was pitched at a 14.4 percent premium on the closing prices of the shares in Australia before the announcement, but this flipped into a discount in later trading, implying investors expect a sweetener from BHP or a rival offer.

The Rio board was open to other offers and a higher BHP bid, said a source familiar with the deal, who spoke oncondition of anonymity.

Rio wouldn't comment on whether it had received other approaches, although analysts said the company's range of operations and profit outlook made it an attractive target.

Only hours earlier, Rio had mopped up the last of the shares in aluminium maker Alcan, which it acquired for .1 billion after trumping an offer by Alcoa Inc. .

Credit ratings agency Moody's said it may put BHP's rating under review for a possible downgrade if a formal offer is made, reflecting uncertainties about integration risk, regulatory restrictions and the financial policies.

REGULATORY CONCERNS BHP has not said how it would address anti-trust issues that may arise, particularly in iron ore where it and Rio already mine a combined 277 million tonnes annually and are spending heavily to expand further. Only Brazil's CVRD mines more.

However, Rio's acquisition of Australian and Canadian iron ore miner North in 2000 raised few alarms with regulators.

Given neither company sells much into the highly regulated U.S. and European markets, Tim Barker of BT Financial Group said he doesn't see any anti-trust issues.

''The scarcity and the difficulty of bringing on new projects, sourcing people, makes these sorts of consolidations attractive,'' said Denis Donohue, senior portfolio manager of Suncorp Metway Investment Management, which owns shares in BHP and Rio Tinto.

Rio's rich iron ore, coal and copper mines as well as its ranking as the world's top aluminium maker would offer diversification from oil for China's PetroChina <601857.SS>, which has a market value exceeding that of BP Plc .

Shares in PetroChina more than doubled in their market debut on Monday after it raised billion in the world's biggest IPO this year, surging past analysts' expectations.

In Russia, the world's biggest nickel miner Norilsk Nickel has said it will look overseas for more assets after completing the largest foreign acquisition by a Russian company, Norilsk already explores with Rio Tinto in the Russian Far East and with BHP in northwest Russia and western Siberia.

BHP -- which only merged with Billiton in 2001 -- almost went bankrupt in the late 1990s after a disastrous foray into copper mining in the United States, which raised the company's penchant for spreading its commodity base far and wide.

Similar to BHP, Rio is a combination of two companies that merged in 1997.

The British-based Rio Tinto Co was formed in 1873 to mine ancient copper workings at Rio Tinto near Huelva in Spain. In Australia, Consolidated Zinc was incorporated in 1905 to treat zinc bearing mine waste from the outback.